Texas Salary & Paycheck Calculator

Texas Income Tax Overview (2026)

Texas has no state income tax — one of only nine states. This is a major draw for high-income earners and businesses. Texas funds services through a 6.25% sales tax (up to 8.25% with local additions) and high property taxes.

In addition to state tax, all Texas workers pay federal income tax (10%–37% marginal rates) and FICA — Social Security (6.2%) and Medicare (1.45%), totaling 7.65% of gross wages. Voluntary deductions like 401(k) contributions or health insurance premiums further reduce taxable income.

Cost of Living in Texas

Texas costs vary dramatically. Austin and Dallas median home prices exceed $450,000. Houston is more affordable at $300,000. San Antonio is around $260,000. No state income tax is a major advantage, but property taxes are high (averaging 1.5–2.5% of home value).

When evaluating a job offer in Texas, consider not just the salary but total compensation — employer benefits, retirement match, and location-specific costs. A $70,000 salary in a low cost-of-living Texas city may be more livable than $85,000 in a high-cost metro.

Top Industries and Employers in Texas

Texas's economy is anchored by energy, technology (Dell, Tesla Gigafactory, Apple campus), aerospace (NASA Houston), healthcare, agriculture, finance. The state median household income is approximately $62,000 per year, though this varies significantly by region and occupation.

Texas follows the federal minimum wage floor of $7.25/hour, so entry-level pay here is set largely by employer competition rather than state law, and the state's $62,000 median household income sits close to the national average, with energy as the largest single influence on local pay scales.

How Texas Compares to Other States

Because Texas has no state income tax, residents keep significantly more of each paycheck than in neighboring states. For a $75,000 salary, the difference between Texas and a high-tax state like California can exceed $6,000 per year.

For workers evaluating a potential relocation, state income tax is just one factor. Property taxes, sales taxes, cost of living, job market depth, and quality of public services all contribute to the complete financial picture. Use our Salary Calculator to compare take-home pay across all 50 states side by side.

How to Calculate Your Texas Take-Home Pay

Your net pay is your gross salary minus: (1) federal income tax based on your bracket and filing status, (2) FICA at 7.65% of gross wages, (3) Texas state income tax (zero in Texas), and (4) any voluntary deductions such as 401(k), HSA, or health insurance premiums. The calculator above handles steps 1–3 automatically.

Tax-Advantaged Strategies for Texas Workers

Regardless of your state tax rate, contributing to pre-tax retirement accounts like a 401(k) or traditional IRA reduces your federal taxable income dollar for dollar. In 2026, you can contribute up to $24,500 to a 401(k) and $7,500 to an IRA. For someone earning $60,000 in Texas, maxing the 401(k) reduces federal taxable income by $24,500 — saving approximately $2,940 in federal tax (at 12% marginal rate) plus the full FICA contribution on deferred amounts.